EMEA Base Oil Price Report


This week saw a return to business as usual for base oil markets, with many buyers and sellers playing catch-up after extended holidays clouded takes on the scene last week.

Now there are many calls for purchasing relatively large quantities of all types of base oil. Among these are contacts with API Group I suppliers who would not have figured prominently before the European Union and allied countries banned Russian imports of base oils and other petroleum products.

Cargoes of this category are now coming into the European arena from a variety of locations such as Saudi Arabia and the United States. Whether at the instigation of European buyers or because sellers recognized an opportunity, these sources are filling the void created by the ban.

Inquiries for Group II are also prominent, with a number of blenders opting to move across from Group I given the shortage of that grade. Demand for Group II is rising and is forecast to continue doing so through the summer and into the latter part of this year. This represents an uptick from the first part of 2023 and appears to also stem from healthier demand for finished lubricants.

The Group III supply picture in Europe and Middle East Gulf regions is also booming as a number of cargoes are moving from the latter region into the former. The Group III plant in Cartagena, Spain, is running at full speed just prior to a maintenance shutdown. Large cargoes are loading continually to feed supply hubs in Northwestern Europe.

Group III demand is rising in the Middle East Gulf region, too. Markets there are being supplied by local output from Abu Dhabi, United Arab Emirates, and Sitra, Bahrain, increasingly supplemented by cargoes from South Korea and Malaysia.

Base oil premiums to diesel are rising, and prices for Group I and II are firming – trends that could lead refiners to once again begin optimizing base oil production over fuels, although this change could take time to come about.

Crude oil prices continued sliding the past week as demand is not standing up to expectations in major economies such as India and China. China reported a dip in gross domestic product for April, bucking forecasts. These developments took markets by surprise and are causing crude and feedstock prices to waver.

Dated deliveries of Brent crude and West Texas Intermediate both fell around $5 per barrel from the middle of last week but then regained about $3. The former benchmark is now at $76.80/bbl, for July front month settlement, while the latter is at $73.10/bbl, still for June front month.

Low-sulfur gas oil changed little the past week, coming in at $689 per metric ton, still for May front month. All of these prices were obtained from London ICE trading late May 8.


Prices for Group I exports from Europe have continued to firm, although few producers have the barrels to sell abroad. Those who do are finding they can almost name their price, since many traders have little option but to go with numbers being offered. Offers are carrying very short validities since sellers have other buyers in the queue.

European suppliers do need to stay competitive since they are being pitted against alternative supplies from the U.S. and the Middle East Gulf.

Turkey as an export destination has gone quiet during the past couple weeks, with lesser quantities of both Russian and Mediterranean barrels finding their way into this market. Elections are coming up, and the recent Ramadan and Eid holidays, effects of the February earthquake and dreadful currency woes linked to inflation appear to have combined to cause an economic downturn.

Prices for Group I exports from Europe are pushed higher this week to between $1,020 per ton and $1,055/t for solvent neutral 150 and $1,085/t-$1,140/t for SN500 and SN600, all on an FOB basis. Two bright stock offers were heard to include values of $1,295/t-$1,345/t, depending on source and quantity.

nAs mentioned above, Group I trade within Europe now includes supplies entering the market from new or uncommon sources, such as Saudi Arabia and the U.S. A season of maintenance turnarounds at European refiners that make Group I could lead to shortages in that market.

There is still a hard core of buyers maintaining that they can get by on small, frequent purchases rather than making bigger ones to rebuild inventories. But the difference between plentiful availabilities and a short market is very fine, and this market could tighten very quickly.

Prices for Group I sales within the region are unchanged at €1,050/t-€1,080/t for SN150, €1,155/t-€1,185/t for SN500 and around €1,390/t for bright stock.

The euro rose in value the past week compared to the U.S. dollar, posting at $1.10134 May 8. The price differential between Group I exports and Group I sales within the region is also unchanged at €125/t-€185/t, exports being lower.

European Group II base oil demand has been rising and continues to show positive signs for suppliers. How much can be put down to blenders switching from Group I to Group II is difficult to say. One would expect that ongoing updates to industry and original equipment manufacturer performance specifications for finished lubricants would require increased amounts of premium base oils.

There was no new information the past week about the possibility of a free trade agreement between the EU and the U.S., which would eliminate a 3.7% import duty charged now to Group II imports from the U.S.

Group II prices are unchanged at €1,090/t-€1,175/t ($1,196/t-$1,289)  for 100 neutral, 150N and 220N and at €1,295/t-€1,360/t ($1,421/t-$1,492/t) for 600N. These values apply to a broad range of Group II oils from Europe, the U.S., Asia-Pacific and Red Sea sources, imported either in bulk or in flexi-tanks.

Group III supplies in Europe are being boosted by a number of cargoes – some of which have arrived and some due in coming days and weeks from Middle East Gulf and Malaysian sources. These cargoes are in addition to the considerable local production from Cartagena. This facility will very soon begin a scheduled shutdown for maintenance, although it has been heard that base oil production and availability will be largely unaffected by the work.

The bizarre situation that has two parties offering base oils from the same Malaysia source continues. The positive news for Group III buyers in Europe is that the situation could exert downward pressure on prices. Other suppliers are closely watching the situation in case of developments requiring their response.

At least one of the South Korean suppliers that recently entered the European market again reduced prices. As reported here previously, these suppliers may be trying to buy market share. It also possible that at least one of the companies may be offering a low price for 4 centiStoke oils because its product in that viscosity grade has lower specifications than competing products.

Prices for Group III oils with partial slates of finished lubricant approvals – or with no approvals – are now at €1,685/t-€1,825/t for 4 and 6 cSt and at €1,735/t-€1,755/t for 8 cSt, where available, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Group III oils with full slates of approvals, currently produced by the Cartagena refinery, are unchanged at €2,020/t-€2,060/t for 4 and 6 cSt on an FCA basis from hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain. Only small quantities of 8 cSt are demanded for the European market, but sales into destinations such as India and Turkey are priced around €1,920/t on an FOB basis.

Baltic and Black Seas

Baltic reports have another Russian export cargo loaded out of Svetly for receivers in Gebze. Again, the size of the cargo has not been confirmed, but one vessel that may be chartered to take this quantity is assessed to carry around 10,000 tons of two grades of base oil. These grades would be SN 150 and SN 500, the latter grades possibly being the greater quantity. The vessel is believed to be Turkish-flagged.

Other shipping inquiries remain for supplies to Turkey, and a further 10,000-ton cargo is offered into Nigeria. Loading on the latter parcel may not take place until all has been settled with finance and terms of trading. Finding suitable vessels to take cargoes out of Kaliningrad is becoming more difficult, even with some Turkish owners declining to put vessels up for charter.    

A couple of cargoes from Antwerp-Rotterdam-Amsterdam have been flagged up as going into Klaipeda and Riga. Blenders in Lithuania and Latvia are now taking mainstream European barrels to replace Russian Group I base stocks. The European Union ban on Russian base oil imports has caused a reversal of trade. Sellers from Gdansk are looking at setting up what could become regular supplies into the Baltic, replacing the Russian barrels that are now banned from going into Latvia and Lithuania. The strange fact is that Russian supplies by train are still transiting through Latvia and Lithuania, going into shore storage in Riga and Svetly in Kaliningrad. As long as these quantities are not destined for any EU or other allied receivers, then this exercise can continue under EU rules and regulations. Effectively, the base oils are “under bond” when transiting.

Rerefined base oils have also stepped into the frame to supply blenders in Klaipaeda, loaded out of Kalundborg in Denmark, where Avista have part of their operation.

FOB prices ex Svetly are “guesstimates” at best and are established by looking at  the landed prices of material going into Gebze in Turkey. CIF prices are taken and discounted by estimated freight rates. Prices are not exact or precise, but as estimates and indications only, SN 150 levels are put at $825/t-$875/t, with SN 500 at $845/t-$890/t.

The execution of Lukoil cargoes going into Nigeria has still not been clarified, since to procure an import license, a local letter of credit must be issued with corresponding references to allow the importation of the cargo. Letters of credit are issued by local Nigerian banks and then reconfirmed by a prime European bank prior to cargo loading and issuance of bills of lading. Russian traders are unable to follow this process and it is not clear how a letter of credit would be handled by Russian banks – if at all. Further investigation of this process is being sought through various sources.

FOB prices for Group I material from Gdansk refinery are in line with European mainstream pricing; therefore, they are slightly higher. SN 150 is assessed at $1,025/t-$1,070/t. SN 500 is at $1,095/t-$1,140/t, depending on destination. Quantities of bright stock remain estimated at $1,300/t-$1,355/t.

The Turkish base oil market is extremely quiet with only local supplies of Russian imports still going into the main ports. This cargo from the Baltic will add to the total Russian supplies, along with one cargo from Aghio going into Derince with 4,400 tons of Group I neutrals. Turkish blenders are looking to take material from Mediterranean sources such as Livorno, Aghio and Augusta in Sicily. With Livorno refinery going into turnaround only for fuels production, it may still be possible to offer for a Group I cargo for Gebze.

Indications from Greek sellers in Aghio are still exceptionally keen and have been heard on basis of CIF Gebze, at $1,025/t for quantities of SN 150, with SN 500 and 600 at $1,060/t-$1,085/t. These remain very low prices, although there are new reports of new offers that contain higher prices. These levels are believed to be around $1,085/t for SN 150, with SN 600 at around $1,095/t.

Sources in Turkey have commented that the Turkish market has gone quiet and will remain quiet until after the elections in a few weeks time.

Tupras availabilities from the refinery in Izmir are showing, with prices in dollars around $955/t for spindle oil, $1,095/t for SN 500, with bright stock at $1,325/t. Prices are for ex-rack truck sales.

Lukoil have two cargoes from Limas terminal in Turkey. One parcel of 4,000 tons is believed to have loaded, or is being loaded on a prompt basis, with another parcel of 6,500 tons of Russian export barrels to load later this month. Cargoes will be supplied from Volgograd refinery, stored in Limas terminal and then re-shipped to receivers in Singapore. Any available outlet for Russian base oils is considered crucial to Russian refineries to continue producing base oils.

Group II ex-tank prices are maintained with levels currently assessed at €1,210/t-€1,245/t for the three lower vis products –  100N, 150N and 220N – with 600N at €1,390/t-€1,485/t. Supplies of Group II grades may be sourced from the Red Sea, the U.S., South Korea and Rotterdam or hub storage in Valencia.

Partly-approved Group III base oils resold by distributors on an FCA basis or on a road tank wagon-delivered basis, are maintained and are assessed at €1,865/t-€1,900/t. Fully-approved Group III grades delivered into Gemlik from Cartagena will be priced at around €2,250/t-€2,300/t FCA.

Red Sea news has Luberef with a number of large base oil cargoes moving to Ras Al Khaimah in the U.A.E. and Mumbai anchorage. The cargo of around 7,000 tons will discharge in the U.A.E. primarily and then sail to Mumbai anchorage. The west coast of India is one of the regular destinations for Group I and Group II cargoes, loading Group I and Group II out of Yanbu and Group I neutrals only from Jeddah.

Large cargoes of up to 19,000 tons are expected to load out of both Yanbu and Jeddah, with Group I and Group II base stocks. Other parcels are to be discharged in Port Suakin and, additionally, a cargo of 7,000 tons will be supplied into Aqaba.

Middle East

Middle East Gulf shipping reports are seeing a number of cargoes of varying sizes coming into the U.A.E., which are comprised of Group I and Group II base oils. These cargoes are mainly loading out of Yanbu and Jeddah, although there is one parcel moving from Augusta and Valencia to the U.A.E. Demand is rising for Group II base oils, with more cargoes taking the place of Group I in UAE. Group II cargoes are arriving in the U.A.E., from the Red Sea, South Korea, the United States and Europe.

Group I base oils are still required by many of the smaller blenders, with Group I cargoes of 2,000-3,000 tons supplied from Rayong in Thailand, with alternative supplies of Group I base oils coming out of Indian refineries in Haldia and Chennai. With imports of cheap Russian crude, Indian Oil Corp. and Hindustan Petroleum Corp. have been able to produce larger quantities of Group l base oils which, with raw material costs exceptionally low, have excellent margins when sold into receivers in the U.A.E.  Traders are also offering Group I cargoes coming into the Middle East Gulf region from U.S. Gulf Coast sources.

One interesting move is that U.A.E. traders and also European based companies are inquiring in India about buying large cargoes of Group I base oils for receivers in Nigeria. With FOB prices reported to be extremely attractive, any increase in freight costs could be offset by taking a large cargo from Indian sources. It is not apparent as yet what quantities might be available for Nigeria, although it was heard that one trader was looking at taking up to 20,000 tons of three grades – SN 150, SN 500 and SN 900 – the latter being blended using SN 500 and bright stock.  

The offer for a cargo of Group I base oils to be imported into the U.A.E. from Lukoil may go ahead after all. The prices are reported to be very low, hence the attraction to doing the cargo. The problems regarding the voyage time remain, but this may be offset by the low prices. This report should know by next week if the sellers have been successful in making this cargo work. The parcel is 7,500 tons to load from the Baltic for receivers in Hamriyah.

Group III cargoes exported from the Middle East Gulf continue to load from Sitra and Al Ruwais. The second Stasco cargo from Sitra will load mid-May with around 8,200 tons of Group III grades. The cargo will discharge in Rotterdam before being sold on a break or bulk basis, either FCA or delivered by road tank wagon or barge.

Another cargo will load from Al Ruwais for Adnoc. This parcel appears to be an additional cargo going into distributors in Nantong, China. The vessel will load around 7,000 tons of three Group III grades. Another cargo will load towards the end of May for distributors in Europe. This parcel is estimated to be around 8,000 tons of mainly two grades – 4 centiStoke and 6 cSt – although there will be a small quantity of 8cst on board.

Netbacks for partly-approved and non-approved Group III base oils loaded out of Al Ruwais and Sitra refineries remain unchanged but may be altered downwards next week due to changes in the selling prices in Europe and India. Selling prices in Europe are discounted, albeit in a relatively small manner. Netback returns are currently assessed at $1,725/t-$1,775/t, for the range of 4 cSt, 6 cSt and 8 cSt partly-approved and non-approved Group III base oils.

Netback levels are based on local FCA prices in markets such as Europe, India, the U.S., and China. Netback levels are derived from regional selling prices, less marketing, margins, handling and estimated freight costs.

Group II base oils resold by distributors and traders on an FCA basis in the U.A.E. may be sourced out of European, U.S., Asia-Pacific and Red Sea producers. These grades are sold ex-tank U.A.E., and on a truck-delivered basis within the U.A.E. and Oman. Prices are moved upwards after having been reviewed during this week. Levels are now placed at $1,520/t-$1,465/t for the light vis grades, with 600N at $1,570/t-$1,565/t. The high ends of the ranges refer to road tank wagon deliveries.


South African shipping sources confirmed that another large cargo of around 18,000 tons of mixed base oils will load out of Rotterdam and Fawley, discharging first in Durban, then moving on to Mombasa with the balance of the cargo. The cargo should arrive in Durban around the end of June. On board will be quantities of Group I, Group II and Group III base stocks, with some easy chemicals, which may be white oils.

New potential sources for imported Group I cargoes going into Apapa in Nigeria widened the search with the inclusion of Red Sea, Southern India in addition to the U.S. Gulf Coast and U.S. Atlantic Coast, and Europe. Jeddah was included on the list on the basis that a cargo of two Group I grades sailed from this source to northwest Europe. If that voyage can work into the European market, then there is every possibility that loading out of Jeddah could work into Nigeria. The only drawback is that there are only two solvent neutral grades available out of Jeddah refinery. To load bright stock, even if blended on board with SN 500 to produce SN 900, would entail a two-port loading that uses Yanbu for the same voyage.

The freight rate may be another obstacle to this enterprise, but with a large enough cargo of up to 20,000 tons, economies of scale may make this work.

Other options include the Indian ports of Haldia and Chennai, where low priced Group l base oils from IOC and HPC could be made available. It is not known if large quantities would be possible from either of these sources. Freight costs again could present problems, but ultimately it would depend on quantity.

Russian material is also offered out of the Baltic, but there appear to be hold ups and barriers to making this cargo work with current problems regarding letters of credit and import licenses.

The parcel loaded out of Fawley with around 6,500 tons of two Group I grades is now on the high seas and will deliver base oils in Abidjan in Cote d’Ivoire and Tema in Ghana.

A further large cargo from the U.S. Gulf Coast and U.S. Atlantic Coast, with up to 20,000 tons of three Group I grades is being considered for June, but tying all the loose ends to make this cargo work – going into more than one receiver – is always difficult.

The Livorno parcel of 12,000 tons of three Group I grades should have arrived into Apapa and will discharge SN 150, SN 500 and SN900.

Confirmed prices for a recent cargo had CFR levels at $1,020/t for SN 150, SN 500 at $1,070/t and SN 900 at $1,150/t. If bright stock was loaded as a stand-alone grade as part of the Livorno cargo, the price is estimated to come in at around $1,320/t CFR Apapa. This grade could have been blended with SN 500, at loading, to produce SN 900. The inclusion of bright stock makes the SN 900 grade more expensive.

Offers for cargoes that will arrive later in May, or even into June, will attract higher prices due to FOB levels moving upwards. CFR prices will be assessed as SN 150 at around $1,045/t-$1,080/t, with SN 500 at $1,125/t-$1,165/t and SN 900 at $1,200/t-$1,225/t.

Ray Masson is director of Pumacrown Ltd., a trader and broker of petroleum products in London, U.K. Contact him directly at pumacrown@email.com.

Lubes’n’Greases shall not be liable for commercial decisions based on the contents of this report.

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